# Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2015-04012

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** March 6, 2015
- **Citation:** 80 FR 12264

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 50, 51, 52, 70, and 71
[EPA-HQ-OAR-2010-0885; FRL-9917-29-OAR]
RIN 2060-AR34
Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The U.S. Environmental Protection Agency (EPA) is establishing a final rule for implementing the 2008 ozone national ambient air quality standards (NAAQS) (the “2008 ozone NAAQS”) that were promulgated on March 12, 2008. This final rule addresses a range of nonattainment area state implementation plan (SIP) requirements for the 2008 ozone NAAQS, including requirements pertaining to attainment demonstrations, reasonable further progress (RFP), reasonably available control technology (RACT), reasonably available control measures (RACM), major new source review (NSR), emission inventories, and the timing of SIP submissions and of compliance with emission control measures in the SIP. Other issues also addressed in this final rule are the revocation of the 1997 ozone NAAQS and anti-backsliding requirements that apply when the 1997 ozone NAAQS are revoked. If the primary or secondary ozone NAAQS are revised in the future, the EPA expects that this rule will help facilitate implementation of any new standards.

DATES:

This final rule is effective on April 6, 2015.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2011-0885. All documents in the docket are listed in
http://www.regulations.gov.
Although listed in the index, some information is not publicly available,
i.e.,
confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in
http://www.regulations.gov
or in hard copy at the EPA Docket Center, Room Number 3334 in the EPA William Jefferson Clinton West Building, located at 1301 Constitution Avenue NW., Washington, DC 20004. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

For further general information on this rulemaking, contact Dr. Karl Pepple, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, by phone at (206) 553-1778, or by email at
pepple.karl@epa.gov;
or Mr. Butch Stackhouse, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, phone number (919) 54l-5208, or by email at
stackhouse.butch@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

Entities potentially affected directly by this final rule include state, local and tribal governments. Entities potentially affected indirectly by this final rule include owners and operators of sources of emissions [volatile organic compounds (VOCs) and nitrogen oxides (NO
X
)] that contribute to ground-level ozone formation.

B. Where can I get a copy of this document and other related information?

In addition to being available in the docket, an electronic copy of this notice will be posted at
http://www.epa.gov/air/ozonepollution/actions.html#impl
under “recent actions.”

C. How is this notice organized?

The information presented in this notice is organized as follows:

I. General Information

A. Does this action apply to me?

B. Where can I get a copy of this document and other related information?

C. How is this notice organized?

II. Background

III. What are the SIP requirements for the 2008 ozone NAAQS?

A. What are the applicable deadlines for nonattainment areas under the 2008 ozone NAAQS?

B. What are the requirements for modeling and attainment demonstration SIPs?

C. What are the RFP requirements for the 2008 ozone NAAQS?

D. How do RACT and RACM requirements apply for 2008 ozone NAAQS nonattainment areas?

E. Does the 2008 ozone NAAQS result in any new vehicle I/M programs?

F. How does transportation conformity apply to the 2008 ozone NAAQS?

G. What requirements for general conformity apply to the 2008 ozone NAAQS?

H. What are the requirements for contingency measures in the event of failure to meet a milestone or to attain?

I. How do the NSR requirements apply for the 2008 ozone NAAQS?

J. What are the emission inventory and emission statement requirements?

K. What are the ambient monitoring requirements?

L. How can an area qualify for a 1-year attainment deadline extension?

M. How will the EPA identify whether a potential rural transport area is adjacent to an urban area?

N. What are the special requirements for multi-state nonattainment areas?

O. How will the EPA address interstate and international ozone transport?

P. How will the CAA section 182(f) NO
X
provisions be handled?

Q. Emissions Reduction Benefits of Energy Efficiency/Renewable Energy Policies and Programs, Land Use Planning and Travel Efficiency

R. Efforts to Encourage a Multi-pollutant Approach When Developing 2008 Ozone SIPs

S. What are the requirements for the Ozone Transport Region (OTR)?

T. Are there any additional requirements related to enforcement and compliance?

U. What are the requirements for addressing emergency episodes?

V. How does the “Clean Data Policy” apply to the 2008 ozone NAAQS?

W. How does this final rule apply to tribes?

X. What collaborative program has the EPA implemented for the 2008 ozone NAAQS?

IV. What are the anti-backsliding requirements for the revoked 1997 ozone NAAQS?

A. What is the effective date of the revocation of the 1997 ozone NAAQS?

B. What are the applicable requirements for anti-backsliding purposes following the revocation of the 1997 ozone NAAQS?

C. Application of Transition Requirements to Nonattainment and Attainment Areas

D. Satisfaction of Anti-backsliding Requirements for an Area

E. How will the EPA's determination of attainment (“Clean Data”) regulation apply for purposes of the anti-backsliding requirements?

F. What is the relationship between implementation of the 2008 ozone NAAQS and the CAA title V permits program?

V. Environmental Justice Considerations

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks

H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

K. Congressional Review Act

L. Determination Under CAA Section 307(d)

M. Judicial Review

Appendix A to Preamble—Glossary of Terms and Acronyms

Appendix B to Preamble—List of Areas Nonattainment for the 2008 Ozone NAAQS in Addition to a Prior Ozone NAAQS

Statutory Authority

List of Subjects

II. Background

On March 12, 2008,
1

the EPA announced revisions to the primary and secondary NAAQS for ozone to a level of 0.075 parts per million (ppm) (annual fourth-highest daily maximum 8-hour concentration, averaged over 3 years).
2

Since the 2008 primary and secondary NAAQS for ozone are identical, for convenience, we refer to both as “the 2008 ozone NAAQS” or “the 2008 ozone standards.” The 2008 ozone NAAQS retains the same general form and averaging time as the 0.08 ppm NAAQS set in 1997, but is set at a more stringent level.

1

See
73 FR 16436.

2
For a detailed explanation of the calculation of the 3-year 8-hour average,
see
40 CFR part 50, Appendix I.

When the EPA revises a NAAQS for a particular criteria pollutant, it considers the extent to which existing EPA regulations and guidance are sufficient to implement the standard and whether any revisions or updates to those regulations and guidance would be helpful or appropriate in facilitating the implementation of the revised standard by states, tribes, and local agencies. The Clean Air Act (CAA or Act) does not require that the EPA promulgate new implementing regulations every time that a NAAQS is revised. Likewise, the CAA does not require the issuance of additional implementing regulations or guidance by the EPA before a revised NAAQS becomes effective. The plain language of the CAA and existing EPA regulations may be sufficient in many cases to enable the EPA and the states to begin working together to implement a revised NAAQS. However, where the nature of revisions to a NAAQS indicate that additional regulations or guidance (or revisions to existing regulations or guidance) may be helpful, the EPA endeavors to provide those regulations and guidance to facilitate preparation of SIPs. It is important to note, however, that the existing EPA regulations in 40 CFR part 51 applicable to SIPs generally and to particular pollutants continue to apply even without such updates. This rule revises existing regulations and guidance as appropriate to aid in the implementation of the 2008 ozone NAAQS.

Promulgation of a NAAQS triggers a requirement for the EPA to designate areas as nonattainment, attainment, or unclassifiable, and to classify the areas at the time of designation. The EPA has already completed area designations and associated classifications for the 2008 NAAQS, and they were effective July 20, 2012 (May 21, 2012; 77 FR 30088). The EPA also issued a Classifications Rule at the same time which established air quality thresholds for each nonattainment classification (May 21, 2012; 77 FR 30160).

The EPA also undertook notice and comment rulemaking on the CAA nonattainment area provisions as they apply to the 2008 ozone NAAQS and appropriate rules to implement those provisions, which is complete with this final rule. The public comment period on the June 6, 2013, notice of proposed rulemaking (NPRM) (78 FR 34178) for the SIP Requirements Rule ran from June 6, 2013, to September 4, 2013. The EPA received 54 comment submissions on the NPRM. The preamble to this final rule discusses the comments received and how they were considered by the EPA in general terms. The Response to Comments document provides more detailed responses to the comments received. The public comments received on the NPRM and the EPA's Response to Comment document are posted in the docket at
www.regulations.gov
(Docket ID No. EPA-HQ-OAR-2011-0885).

We are taking multiple actions in this rule pertaining to submittal deadlines and specific CAA requirements for the content of SIPs for the 2008 ozone NAAQS. As a general matter, this final rule follows the same basic principles and approach that the EPA applied to interpreting the CAA's part D, subpart 2 ozone nonattainment area requirements in the EPA's development of the implementation rules for the 1997 ozone NAAQS.
3

Additionally, we are revoking the 1997 ozone NAAQS for all purposes and establishing anti-backsliding requirements for areas that remain designated nonattainment for the revoked NAAQS.

3

See
the Phase 1 (69 FR 23951, April 30, 2004) and Phase 2 (70 FR 71612, November 29, 2005) Rules.

Regarding the format of the following sections of this preamble, on topics where we proposed an action, we include detailed information about what we proposed, what we are finalizing and our rationale, as well as responses to significant comments. With topics where we did not propose any action, we provide guidance on that topic in the preamble. For a comprehensive look at all comments received and responses to those comments, please refer to the Response to Comment document in the docket.

III. What are the SIP requirements for the 2008 ozone NAAQS?

A. What are the applicable deadlines for nonattainment areas under the 2008 ozone NAAQS?

1. What is the deadline for submitting nonattainment area SIP revisions for the 2008 ozone NAAQS?

a. Summary of the Proposal

For purposes of the 2008 ozone NAAQS, the EPA proposed two alternatives regarding the deadlines for submitting the various elements of an ozone nonattainment area SIP, including emission inventories, RACT SIPs and emission statement SIPs, Ozone Transport Region (OTR) RACT, 15 percent rate-of-progress (ROP) plans and Moderate area attainment demonstrations, and the 3 percent per year RFP plans and attainment demonstrations for Serious and higher areas. The two proposed alternatives for SIP due dates were (1) the period of time provided by CAA section 182, and (2) a state's choice of either submitting all elements in accordance with the timeframe provided by CAA section 182 or submitting all elements under a consolidated approach, no later than 30 months after the effective date of designation. The consolidated SIP approach would provide more time for some SIPs, and less time for others.

The EPA also proposed a timeframe, for Serious and higher areas, of 4 years for states to develop their attainment demonstrations and 3 percent per year RFP plans. This was a proposed change from the approach used in the implementation of the 1997 ozone NAAQS, but is consistent with the timeframe allowed under CAA section 182.

Additionally, the EPA requested comment on its proposal to align the due date of the vehicle inspection and maintenance (I/M) program SIP with the

due date of the attainment demonstration SIP so that both are due at the same time. This was similarly a proposed change from the current I/M SIP deadline for ozone nonattainment areas (1 year after the effective date of designation and classification under a revised ozone standard).

We proposed that states with areas initially classified as Severe or Extreme for the 2008 ozone NAAQS would be required to submit a CAA section 185 SIP no later than 10 years after the effective date of designation and classification for the 2008 ozone NAAQS.

Finally, the EPA proposed that all SIP due date timeframes would run from the effective date of nonattainment designations for the 2008 ozone NAAQS.

b. Final Action

We are finalizing the approach that the SIP elements listed in the proposal are due based on the timeframes provided in CAA section 182. That is, states with areas designated nonattainment have 2 years from the effective date of nonattainment designation
4

to submit emission inventories (required by CAA section 182(a)(1)), RACT SIPs (CAA section 182(b)(2)) and emission statement SIPs
5

(CAA section 182(a)(3)(B)); 3 years to submit 15 percent ROP plans (CAA section 182(b)(1)) and Moderate area attainment demonstrations (CAA section 182(b)(1)); and 4 years to submit 3 percent per year
6

RFP plans (CAA section 182(c)(2)) and attainment demonstrations (CAA section 182(c)(2)) for Serious and higher areas. This approach conforms to the manner in which the 1997 ozone NAAQS was implemented, with the exception of the 4th year provided to areas classified Serious and higher to develop attainment demonstration SIPs for the 2008 ozone NAAQS. Additionally, we note that OTR states that owe SIPs due to CAA section 184 must meet the same SIP due dates listed previously.

4
The effective date of designations was July 20, 2012.
See
77 FR 30088.

5

See
section III.J.2 of this rule for additional information on emission statements.

6
Typically submitted in 3-year increments, thus as 9 percent RFP plans that produce average reductions of 3 percent per year.

The EPA is also finalizing the alignment of the vehicle I/M program SIP due date with the due date for the attainment demonstration SIP for the area. This will be achieved by revising 40 CFR 51.372(b)(2) of the vehicle I/M rule
7

to replace the current 1-year deadline for vehicle I/M program SIP submissions with a deadline of no later than the due date for submitting the area's attainment demonstration SIP.

7

See
71 FR 17705, April 7, 2006.

The EPA is also finalizing the due date of the CAA section 185 penalty fee program SIPs from areas initially classified as Severe or Extreme for the 2008 ozone NAAQS as 10 years from the effective date of designations. For areas that are reclassified to Severe or Extreme after the original 2008 designations and classifications, the EPA will establish an appropriate fee program SIP submission deadline as part of the reclassification action.

We note that in the proposed SIP Requirements Rule, the EPA did not include a specific due date for nonattainment NSR SIPs for the 2008 ozone NAAQS. This final rule includes a due date of 3 years from the effective date of designation for states with nonattainment areas for the 2008 ozone NAAQS to submit their nonattainment NSR SIPs as a logical outgrowth of the proposed rule and the comments submitted. Additional discussion of this due date and our rationale for that date are provided in the following
Comments and Responses
section, which discusses NSR requirements in greater detail.

As proposed, the EPA is finalizing that these various SIP due dates are established based on the effective date of designations for the 2008 ozone NAAQS. For areas initially designated nonattainment, this effective date was July 20, 2012.
8

8

See
77 FR 30088, May 21, 2012; and 77 FR 34221, June 11, 2012.

c. Rationale

After considering comments questioning the legal supportability of the consolidated approach, the EPA has concluded that we do not have a sufficient statutory basis to provide this flexibility.
9

Therefore, the EPA is finalizing the approach that the various SIP elements are due based on the timeframes provided in CAA section 182.

9
The EPA believes that the recent ruling by the D.C. Circuit Court on the Classifications Rule (77 FR 30160, May 21, 2012) impacts the level of flexibility EPA is able to provide regarding SIP due dates.
See NRDC
v.
EPA
(D.C. Cir. No. 12-1321, Dec 23, 2014).

When implementing the 1997 ozone NAAQS, the EPA provided areas classified as Serious and higher only 3 years to develop and submit attainment demonstration SIPs. The EPA is now providing the maximum of 4 years to develop and submit these SIPs, consistent with the CAA. The policy reasons that existed at the time the Phase 2 rule was developed (
i.e.,
the need for timing consistency between subpart 1 and subpart 2 areas within the same region, the timing of the large-scale interstate transport modeling underway at the time, and the option of coordinated planning with the similarly timed PM
2.5
SIPs) are not generally circumstances faced currently by the Serious and higher areas. Thus, the EPA concludes that it is not appropriate to shorten the time period allowed by the Act to submit these SIPs.

Regarding the alignment of due dates for attainment demonstration SIPs and vehicle I/M program SIPs, the EPA believes this allows the best use of state resources. Areas need to determine together the total amount of emissions reductions needed for attainment and the amount of emissions reductions to achieve from different sectors and strategies (including vehicle I/M), before designing a vehicle I/M program capable of achieving the necessary reductions to demonstrate attainment. Requiring submittal of a vehicle I/M program in advance of an attainment demonstration for the current or future ozone standard could result in significant unnecessary work on modeling and SIP revisions if revisions to the vehicle I/M program are later deemed necessary to integrate with the overall attainment strategy. Although no new vehicle I/M programs are required under the initial designations and classifications for the 2008 ozone NAAQS, this change will apply to any current Marginal areas that may be required to adopt vehicle I/M as a result of missing an attainment deadline and being reclassified to a higher nonattainment classification in the future.

We believe the submittal date for the CAA section 185 penalty fee program SIPs is consistent with section 182(d)(3) of the CAA, which provided slightly more than 10 years for submission of the fee program SIP revision for areas designated as nonattainment and classified as Severe or Extreme by operation of law in 1990 for the 1-hour ozone NAAQS.

The EPA has historically based the due date of the SIPs discussed previously from the effective date of designations and sees no reason to depart from that practice here.

d. Comments and Responses

Comment:
Several commenters supported the idea of a consolidated SIP submittal, but thought that the 30 months provided in the proposal for the consolidated submittal was not sufficient to entice any states to take advantage of the option. Many commenters expressed a concern that the EPA did not have a sufficiently firm legal basis to allow states to delay any of the required SIP submissions beyond

the timeframes provided in the statute, nor to require early submittal of any SIPs.

Response:
The EPA proposed the consolidated approach in an attempt to provide flexibility and a potential burden reduction option to states. After considering the comments questioning the legal supportability of this approach, we concluded that at this time we do not have a sufficient basis to support this flexibility. Thus, we are not finalizing the consolidated approach.

Comment:
One commenter disagreed with the EPA's proposal that the SIP submittal due dates in subpart 2 should run from the effective date of designations. The commenter believed that the SIP due dates must run from the date the designations are signed.

Response:
We disagree with the commenter that the CAA mandates the SIP submittal due dates in subpart 2 must run from the date the designations are signed instead of the effective date of designations. The EPA believes that its historic practice of establishing SIP due dates that run from the effective dates of designations, as it did for the 1997 ozone NAAQS, is appropriate and legally supportable. Therefore, we are not deviating from this practice.

Comment:
Two commenters supported the EPA's proposal to align the vehicle I/M program SIP and attainment SIP deadlines, while two other commenters stated that any change to the vehicle I/M program SIP deadline needs to be consistent with the deadlines prescribed in the CAA and not delay implementation of required I/M programs.

Response:
The EPA's decision to align the I/M SIP submittal deadline with the deadline for submitting the attainment demonstration will not impact the emission reductions achieved through the vehicle I/M program requirement because we are not changing the deadline by which affected areas must begin testing and repairing vehicles. Further, the EPA believes that it must, of necessity, provide a reasonable interpretation of the CAA's vehicle I/M program SIP submission deadline because the Act's basic vehicle I/M program SIP submission requirement of “immediately upon enactment” of the CAA is impossible to meet. Lastly, given the degree to which the overall attainment demonstration will rely on emission reductions derived from vehicle I/M, it is reasonable and cost-effective to allow states to coordinate these two planning requirements.

Comment:
One commenter noted that the proposal was silent about the due date of the nonattainment NSR SIP. The commenter stated that the EPA should clearly establish the associated due dates for nonattainment NSR SIP submittals.

Response:
The commenter is correct that the discussion of SIP submittal deadlines in the proposed SIP Requirements Rule did not include the date on which states must submit for the EPA's approval the required nonattainment NSR SIP applicable to the 2008 ozone NAAQS. This final rule includes a deadline of 3 years from the date of designation for states to submit their nonattainment NSR program SIPs for the 2008 ozone NAAQS. This date is consistent with the submittal date that the EPA provided states to develop an approvable nonattainment NSR program for the 1997 ozone NAAQS in the Phase 2 Rule, and is consistent with CAA section 172(b), which states that the EPA shall establish a date no later than 3 years from the date of the nonattainment designation.
10

Consequently, the EPA does not believe it has discretion to set a date longer than 3 years, and also concludes that states may need up to 3 years to develop and submit any necessary SIPs.

10

See
70 FR 71612 at 71672 and 71683 (November 29, 2005).

In the Phase 2 Rule, we indicated that the 3-year SIP deadline facilitates coordination of NSR program changes with the submission of the attainment plan, which was also due within 3 years. We recognize that CAA section 182(a)(2)(C)(i), under the heading “Corrections to the State implementation plans—Permit programs” contains a requirement for states to submit NSR SIP revisions to meet the requirements of CAA sections 172(c)(5) and 173 within 2 years after the date of enactment of the 1990 CAA Amendments. As explained in our Phase 2 rulemaking, we believe the submission of NSR SIPs due on November 15, 1992, fulfilled this CAA requirement.
11

Accordingly, we do not believe that the 2-year deadline contained in CAA section 182(a)(2)(C)(i) applies to subsequent NSR SIPs for revised ozone standards, including the nonattainment NSR SIPs for implementing the 8-hour ozone NAAQS. In addition, we note that while CAA section 182 specifies the offset ratios or major source thresholds to be included in the revised NSR SIP, it is silent as to the SIP submission deadline (
see, e.g.,
CAA section 182(a)(4), CAA section 182(b)(5) and CAA section 182(c)). Given this gap in CAA section 182, we believe it is reasonable to look to CAA section 172(b) in establishing a deadline for submission of the nonattainment NSR SIP. While the EPA did not propose a date on which states must submit for the agency's approval the required nonattainment NSR SIP, stakeholders could have anticipated that we would continue our prior practice unless we proposed to take a different course. In this rule, we are continuing our prior practice, as reflected in the Phase 2 rule for the 1997 ozone NAAQS, of including a deadline of 3 years from the date of designation for states to submit their nonattainment NSR program SIPs.

11

Ibid
.

2. What are the attainment dates for the 2008 ozone NAAQS?

a. Background

For purposes of the 2008 ozone NAAQS, the EPA proposed two options for establishing the maximum attainment dates for areas in each nonattainment classification in its separate Classifications Rule issued on May 21, 2012.
12

Under the first option, the attainment dates would be the precise number of years specified in Table 1 with such time period running from the effective date of designation. Under the second option, the attainment dates would be December 31 of the year that is the specified number of years in Table 1 after designation. The first option was the same approach we took for the 1997 NAAQS, where we would interpret “year” in the subpart 2 classification table to mean consecutive 365-day periods,
13

and we would substitute “after the effective date of designation” for the “after November 15, 1990” language in the subpart 2 classification table. Under this approach the attainment deadline would fall a precise number of years after the effective date of designation. Specifically, the initial area designations for the 2008 ozone NAAQS became effective on July 20, 2012, and the attainment dates would run from July 20, 2012, such that the 3-year attainment deadline for Marginal areas would be July 20, 2015.

12

See
the proposal (77 FR 8197; February 14, 2012) and the final (77 FR 30160; May 21, 2012) Classifications Rule for the 2008 ozone NAAQS.

13
Except in the case of a leap year, where the year would be a rolling 366 day period.

For the second option, which the EPA promulgated in the final May 2012 Classification Rule (77 FR 30160), the attainment date would be specified as a certain number of years from the end of the calendar year in which an area's nonattainment designation is effective. In other words, since the effective date of designations for the 2008 ozone NAAQS is July 20, 2012, the 3-year

attainment deadline for Marginal areas would be December 31, 2015.

The end of calendar year attainment date in the May 2012 Classifications Rule was challenged in NRDC v. EPA (D.C. Cir. No. 12-1321). On December 23, 2014, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion holding that the EPA's decision to run the attainment periods from the end of the calendar year in which areas were designated was unreasonable. While recognizing that there is a “gap” in the statute since the CAA runs the attainment periods from the date of enactment of the CAA Amendments of 1990, the Court concluded that nothing in the statute or congressional intent authorized the EPA to establish the attainment dates for designated ozone nonattainment areas as December 31st of the relevant calendar years, but rather that such deadlines are more appropriately calculated as annual periods running from the date of designation and classification as the EPA had done in past ozone implementation rules.

b. Action on Attainment Dates

To provide clarity to states after the DC Circuit court decision, the EPA is modifying 40 CFR 51.1103 consistent with that decision to establish attainment dates that run from the effective date of designation,
i.e.,
July 20, 2012.
14

This is the same approach the EPA used in past ozone implementation rules and the approach the court indicated was consistent with Congressional intent.
15

The maximum attainment dates for nonattainment areas in each classification under the 2008 NAAQS based on the July 20, 2012, effective date are as follows: Marginal—3 years from effective date of designation; Moderate—6 years from effective date of designation; Serious—9 years from effective date of designation; Severe—15 years (or 17 years) from effective date of designation; and Extreme—20 years from effective date of designation. In addition to being consistent with the court decision, this outcome was supported by several commenters on the EPA's February 2012 proposed Classifications Rule (77 FR 8197, February 14, 2012). These supporting commenters believed this outcome to be a plain reading of the CAA, and less likely to result in further delays in implementing controls in nonattainment areas (
see
77 FR 30160 at 30166, May 21, 2012).

14
We are finalizing this approach without additional notice-and-comment. As noted, we took comment in the original proposal on two approaches: The option we promulgated and which the court rejected, and the option we are promulgating here. Moreover, the court decision strongly indicates that the approach we are promulgating here is the only approach that is consistent with Congressional intent. In light of the need for certainty for the states and regulated parties, the fact that we previously solicited comment on the approach we are adopting here, and the limited discretion the court believes EPA has been provided under the Act, we believe additional comment is unnecessary and contrary to the public interest.

15
We note that during the comment period on the May 2012 rule establishing the attainment dates, a few commenters claimed that the attainment period should run from the time the designations actions were signed by the Administrator rather than the effective date of designation. In the final May 2012 rule, we responded to this comment explaining why we believed the arguments the commenters raised were not supported by the statute. Regardless we note that whether the attainment date runs from the date of signature or the effective date of designation, the attainment year will be the same, as an attainment showing is based on the most recent three full years of ozone data available. Thus, for example, under either approach, the relevant years for demonstrating attainment for a Marginal area will be 2012-2014 and for a Moderate area, 2015-2017.

B. What are the requirements for modeling and attainment demonstration SIPs?

1. Marginal Areas

Under CAA section 182(a), Marginal areas have up to 3 years from the effective date of designation to attain the NAAQS, and are not required to submit an attainment demonstration SIP. The EPA offers assistance to states as they consider the most appropriate course of action for Marginal areas that may be at risk of failing to meet the NAAQS within the applicable 3 year timeframe. States can choose to adopt additional controls for such areas or they can seek a voluntary reclassification to a higher classification category. The EPA believes that voluntary reclassification for areas that are not likely to attain by their attainment date is an appropriate action that will facilitate focus on developing the attainment plans required of Moderate and above areas.

2. Moderate Areas

a. Summary of the Proposal

The EPA proposed to continue to require states with an area classified as Moderate to submit an attainment demonstration,
16

due no later than 3 years from the effective date of an area's designation, based on photochemical modeling or another equivalent analytical method that is determined to be at least as effective as that which is required under the Act for Serious and above areas and multi-state nonattainment areas.
17

This is the same approach used in the implementation rules for the 1997 ozone NAAQS. 40 CFR 51.908(c).

16
An attainment demonstration consists of: (1) Technical analyses, such as base year and future year modeling of emissions which identifies sources and quantifies emissions from those sources that are contributing to nonattainment; (2) analyses of future year emissions reductions and air quality improvement resulting from existing (
i.e.,
already-adopted or “on the books”) national, regional and local programs, and potential new local measures needed for attainment, including RACM and RACT for the area; (3) a list of adopted measures (including RACT) with schedules for implementation and other means and techniques necessary and appropriate for demonstrating attainment as expeditiously as practicable but no later than the outside attainment date for the area's classification; and (4) a RACM analysis to determine whether any additional RACM measures could advance attainment by 1 year.

17
State plans for single nonattainment areas that include more than one state (multi-state nonattainment areas) are also required to have photochemical modeling (
see
CAA section 182(j)(1)(B)).

b. Final Action and Rationale

The EPA is finalizing requirements for Moderate areas as proposed. The EPA continues to believe the requirements for Moderate areas are reasonable, primarily because photochemical modeling is generally available and reasonable to employ. However, this requirement also explicitly allows for alternative analytical methods to be substituted for or used to supplement a photochemical modeling-based assessment of an emissions control strategy. Any alternative analysis should be based on technically credible methods and provide for the timely submittal of the attainment demonstration and implementation of SIP controls. States should review the EPA modeling guidance
18

and consult their appropriate EPA Regional Office before proceeding with alternative analyses.

18
The modeling guidance can be found in the EPA's “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM
2.5
, and Regional Haze,” at the following Web site:
http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf.

c. Comments and Responses

Comment:
Some commenters believed that the EPA exceeds its authority to require states with Moderate nonattainment areas to use photochemical modeling and thus, undermines states' discretionary options allowed under the statute.

Response:
The EPA disagrees with the commenters and believes that we have the authority to require states to use appropriate modeling to predict the effect of emissions on air quality of any NAAQS as we did for the 1997 ozone NAAQS. CAA section 182(c)(2)(A) contains specific requirements for states to use photochemical modeling or another similarly effective equivalent modeling method in their SIPs for

Serious and above nonattainment areas. Additionally, CAA section 182(b)(1)(A)(i) requires RFP plans for Moderate areas to provide for such specific annual reductions in emissions of VOC and NO
X
as necessary to attain the NAAQS by the applicable attainment date. The EPA has interpreted this as a requirement for Moderate areas to submit an attainment demonstration. Since photochemical modeling is the most scientifically rigorous technique to determine NO
X
and/or VOC emissions reductions needed to show attainment of the NAAQS and is readily available, we are requiring photochemical modeling (or a similarly effective equivalent modeling method) for all attainment demonstrations (including Moderate areas). The authority for this requirement for Moderate areas is derived from CAA section 110(a)(2)(k), which gives the Administrator the authority to require air quality modeling for the purpose of predicting the effect on ambient air quality of emissions of any air pollutant for which there is an established NAAQS.

Comment:
One commenter stated that allowing up to 3 years to submit an attainment demonstration is not sufficient time to allow for the emissions inventory development and modeling required for an attainment demonstration. The commenter wanted the EPA to allow “the original four year timeline” to submit attainment demonstrations.

Response:
CAA Section 182 contains two attainment demonstration submittal dates that depend on an area's classification. For Moderate areas, CAA section 182(b)(1)(A) requires a plan within 3 years of the designation date. For Serious and above areas, CAA section 182(c)(2) requires a plan within 4 years of the designation date. In the Phase 2 Rule, 70 FR 71612, at 71639, the EPA required all attainment demonstrations to be submitted within 3 years of designation. However, for this rule, the EPA proposed to allow the original CAA deadlines of up to 3 years for Moderate areas and up to 4 years for Serious areas, 78 FR 34178, at 34183. While the EPA agrees that the development of emissions inventories and modeling for attainment demonstrations can be a lengthy process, the statute does not allow for more than 3 years for a Moderate area attainment demonstration. However, since the statute does allow up to 4 years to submit a Serious (and above) area attainment demonstration, in this rule we are allowing the maximum amount of time provided by the statute for such areas. Therefore, the EPA is finalizing the attainment demonstration submittal dates as proposed; up to 3 years from the effective date of designation for Moderate areas and up to 4 years from the effective date of designation for Serious and above areas.

Comment:
One commenter stated that there are now a number of rural areas in the country with wintertime ozone attainment issues, and recommended that the EPA exempt rural wintertime ozone nonattainment areas from this requirement because a wintertime photochemical grid model or proven alternative analytical method has not been developed. The commenter argued that it is the EPA's responsibility to develop and test models that can be used consistently across the nation.

Response:
The EPA recognizes that the causes of rural wintertime ozone exceedances are different than typical summer exceedances. However, the CAA does not distinguish between summer and winter ozone areas. Areas with wintertime violations are designated as nonattainment based on the same classification thresholds as all other nonattainment areas. They therefore must meet all of the appropriate CAA requirements for their particular nonattainment classification. Nonattainment areas classified as Moderate and above, even those that may experience wintertime ozone problems, are required to submit an attainment demonstration. However, there is flexibility in determining analytical methods to be used in developing the demonstration. The EPA will consider the nature of the ozone problem in reviewing available models and potential alternative methods for demonstrating attainment. There is also ongoing research that has successfully identified enhancements in modeling science which have improved photochemical model performance in wintertime ozone situations. Some of these science updates may be available for states to use in their attainment demonstrations by the time modeling is needed for areas with wintertime ozone problems.

3. Serious and Above Areas

For Serious and higher-classified areas, CAA section 182(c)(2)(A) states that attainment demonstrations must be submitted within 4 years of the designation date and be based on photochemical grid modeling or an equivalent effective method. We continue to believe that photochemical modeling is the most technically credible method of estimating future year ozone concentrations based on projected VOC and NO
X
precursor emissions. Therefore, consistent with the CAA and previous implementation rules, states with areas classified as Serious and higher are required to submit attainment demonstrations within 4 years of the effective date of designation, based on photochemical modeling or an alternative analytical method determined by the Administrator to be at least as effective.

4. What guidance is there for using models to demonstrate attainment?

The procedures for modeling ozone as part of an attainment demonstration are well developed and described in the EPA's “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM
2.5
, and Regional Haze.”
19

This guidance document, as it currently exists, can be used by states for purposes of developing attainment demonstration SIPs for the 2008 ozone NAAQS.

19
The modeling guidance can be found at the following Web site:
http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf.

Commenters requested that the EPA update its modeling guidance pertinent to ozone and that it be made available in advance of SIP submission deadlines. The EPA agrees with this comment and is therefore currently updating the modeling guidance, and we intend to issue the updated guidance prior to the attainment demonstration SIP deadlines.

5. Capturing High Emissions Days in Inventories

In the proposed SIP Requirements Rule, the EPA did not propose changes to modeling requirements for modeling high emissions days. The current modeling guidance addresses, among many other considerations, episode selection and accounting for variability in emissions and meteorology.

The EPA recognizes that there are time periods with relatively higher NO
X
emissions from electric utilities during high energy demand periods,
i.e.,
High Electricity Demand Days (HEDD). Since NO
X
emissions from electric power generation are a significant contributor to the total NO
X
emissions for many ozone nonattainment areas, states that experience these situations should ensure that these emissions are included in photochemical modeling of episode days on which the HEDD situations occurs. In order to properly account for HEDD emissions in the modeling, careful attention should be paid to the temporalization of emissions to the specific day and hour of the day when these emissions occur. We note that the

EPA's current modeling guidance
20

already addresses episode selection and development of accurate emissions input information during peak ozone periods. Some commenters urged the EPA to update the current modeling guidance. The EPA is in the process of updating the current modeling guidance and intends to more specifically address modeling of HEDD in that guidance.

20

http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf.

The EPA did not propose changes in this rule to the emission inventory requirements for capturing high emissions days but received many comments on the rule requirements that should have been directed to EPA guidance documents under development for ozone emission inventories (
see
section III.J of this preamble). They will be considered when these guidance documents are reviewed. The EPA does address the comments referring to the emission inventory guidance in the Response to Comments document for this rule. The comments do not directly impact the outcome of this rule. The EPA responses are provided for completeness and to provide these commenters with more information regarding the EPA's intentions for guidance development related to HEDD emissions.

6. Modeled Attainment Test

The EPA's attainment demonstration modeling guidance addresses the modeled attainment test for ozone, which uses a combination of ambient ozone data and modeled ozone concentrations to estimate future year air quality. The attainment test is applied at each monitor location within or near a designated nonattainment area. Models are used in a relative sense to estimate the response of measured air quality to anticipated future changes in emissions. Future air quality is estimated by adjusting recent monitored values by the modeled relative response to projected future changes in emissions.
21

The EPA additionally recommends application of an attainment test to be performed in unmonitored areas. The recommended attainment test methodology for unmonitored areas has been used in 8-hour ozone SIPs developed for the 1997 ozone NAAQS. To make it easier for states to apply the attainment tests, both the monitor-based test and the unmonitored area test have been incorporated in a software package called the “Modeled Attainment Test Software” (MATS). The MATS is available for no charge at:
http://www.epa.gov/scram001/modelingapps_mats.htm.

21
The EPA recommends using ambient design values that are consistent with the official design values as calculated according to 40 CFR part 50 Appendix N (PM
2.5
NAAQS) and Appendix P (8-hour ozone NAAQS). This includes flagging and removing event-influenced data that meet the requirements set forth in the Exceptional Events Rule (40 CFR 50.14). In general, air agencies flag data that they believe may qualify for removal as an exceptional event and are then responsible for developing and providing documentation to the EPA to support these requests for exclusion. EPA Regional Offices review exceptional events claims and decide whether to concur with each individual claim. Once the EPA concurs with an air agency's request, the event-influenced data are officially noted and removed from the data set used to calculate official design values. In some cases, historical ambient data may meet the requirements of the Exceptional Events Rule, but remain in the data set used to calculate official design values. Air agencies may not have flagged these data as being potentially influenced by exceptional events, or may have flagged these data but not submitted the required documentation. Air agencies sometimes do not closely examine potential event-influenced data that do not affect attainment/nonattainment decisions. However, the influence of potential event-influenced data may affect future year projections that are part of the modeled attainment demonstration. If potential exceptional event-influenced data from the historical record are likely to affect the outcome of the modeled attainment demonstration, we encourage air agencies to consult with their EPA regional office to determine how best to handle this situation.

7. What future year(s) should be modeled in attainment demonstrations?

a. Summary of the Proposal

The EPA proposed that for the 2008 ozone NAAQS, control measures relied upon to demonstrate attainment should be implemented by the beginning of the last full ozone season prior to the area's attainment date. Accordingly, the future year attainment modeling should not extend beyond that time period.

b. Final Action and Rationale

The EPA is finalizing this action as proposed. The EPA stated in the proposal that the future modeling year should be selected such that all emissions control measures relied on for attainment will have been implemented by that year. This same approach was used for the 1997 ozone NAAQS and we continue to believe it is an appropriate approach for modeling of control measures. To demonstrate attainment, the modeling results for the nonattainment area must predict that emissions reductions implemented by the beginning of the last full ozone season preceding the attainment date will result in ozone concentrations that meet the level of the standard.
22

22
Note that for purposes of the 2008 ozone NAAQS, a determination of attainment (or failure to attain), which the EPA is required to make after the attainment date has passed, is based on the most recent 3 complete years of ambient data prior to the area's attainment date. Attainment date extensions are only available if the 4th maximum 8-hour average ozone concentration in the attainment year is below the level of the standard.

Because an area must attain “as expeditiously as practicable,” additional considerations are necessary before a future attainment date can be established. For example, although the latest attainment date under the CAA for a Moderate area designated in 2012 would be 6 years after the effective date of designation, July 20, 2018, under the Classifications Rule,
see NRDC
v.
EPA,
the state would need to conduct an analysis of reasonably available control measures (RACM) (CAA section 172(c)(1)) to determine if it can advance the area's attainment date by at least a year.
23

Results of the RACM analysis may indicate attainment can be achieved earlier through implementation of reasonably available control measures prior to July 20 of an earlier year. For instance, if emission reductions sufficient to demonstrate attainment are implemented prior to July, 2016, then in this example the attainment year and the future projection year should be 2016. The proposal for this rulemaking also stated
24

that, in determining the attainment date that is as expeditious as practicable, the state should consider impacts on the nonattainment area of intrastate transport of pollution from sources within its jurisdiction, and potential reasonable measures to reduce emissions from those sources.

23

See
section III.D.2 of this proposal for a discussion of RACM analysis requirements.

24

See
78 FR 34178 at p. 34191 (June 6, 2013).

We strongly recommend that the state discuss the selection of the future year(s) to model with the appropriate EPA Regional Office as part of the modeling protocol development process.

c. Comments and Responses

Comment:
Many commenters supported the EPA's proposal; however, one commenter believed that it should not matter when the control measure is implemented if the demonstration shows attainment by the attainment date. The commenter provided a specific example of when a large point source plans to shut down in the middle of an ozone season.

Response:
The EPA continues to believe that modeling the emission reductions implemented by the beginning of the last full ozone season preceding the final year of the statutory attainment date is reasonable. The effect on attainment of the NAAQS of emissions reductions that may occur sometime after the start of an ozone season is necessarily uncertain, and

cannot be reliably counted on to ensure modeled attainment in that year. Information about source shutdowns or other emissions reductions that are not accounted for in the modeling can be used as part of a weight of evidence demonstration (
i.e.,
qualitative adjustment based on reductions from additional measures) if necessary to demonstrate timely attainment.

Comment:
One commenter supported the proposal to allow modeling of up to the last year of the statutory attainment date, but disagreed with the RACM requirement to evaluate if attainment can be advanced. The commenter disagreed with anything that would require the demonstration of attainment to be earlier than is required by statute.

Response:
The EPA disagrees with the commenter. A demonstration of attainment would not be required earlier than is required by statute. The statute provides maximum dates by which attainment must be achieved, but in all cases the statute requires that attainment must be achieved as expeditiously as practicable but no later than the maximum date. Therefore, a RACM analysis to examine whether the attainment date can be advanced is required by the statute as part of all attainment demonstrations. Note that a RACM analysis is not required for Marginal nonattainment areas since an attainment demonstration is not required for those areas.

8. Multi-State Nonattainment Areas

Under CAA section 182(j), each state located in a portion of a multi-state ozone nonattainment area is required to use photochemical grid modeling (or any other analytic method determined by the Administrator to be at least as effective) and to take all reasonable steps to coordinate, substantively and procedurally, the development, submittal and implementation of SIPs applicable to the various states within the nonattainment area. The EPA interprets CAA section 182(j) to require coordination on all aspects of nonattainment SIPs, including the development of an attainment demonstration. The EPA did not propose any changes to this longstanding policy, and we did not receive adverse comments on this item.

C. What are the RFP requirements for the 2008 ozone NAAQS?

1. Overview of RFP Requirements

Areas that are designated nonattainment for ozone must achieve RFP toward attainment of the ozone NAAQS. Part D of the CAA contains three separate provisions regarding RFP. Under CAA subpart 1, section 172(c)(2) contains a general requirement that nonattainment SIPs must provide for reasonable further progress; RFP is defined in CAA section 171(1) as “such annual incremental reductions in emissions” as required by CAA part D or as required by the Administrator for ensuring attainment of the NAAQS. CAA sections 182(b)(1) and 182(c)(2)(B) under subpart 2 contain specific percent reduction targets for ozone nonattainment areas classified as Moderate and above and Serious and above, respectively. For Moderate and above areas, CAA section 182(b)(1) requires a 15 percent reduction in VOC emissions from the baseline anthropogenic emissions within 6 years after November 15, 1990. We often refer to this RFP requirement as rate-of-progress (ROP). For Serious and above areas, CAA section 182(c)(2)(B) requires an additional 3 percent per year reduction in VOC emissions, averaged over consecutive 3-year periods, starting within 6 years after November 15, 1990 and until the attainment date. CAA section 182(c)(2)(B) allows NO
X
reductions to be substituted for VOC reductions under certain conditions to meet this RFP requirement. Note that the 15 percent requirement must be met by the end of the 6-year period regardless of when the nonattainment area attains the NAAQS. The 3 percent per year RFP requirement for Serious and above areas applies each year until the attainment date.

The EPA previously interpreted the requirements of subpart 2 as they would apply to areas for the 1997 ozone NAAQS, and we proposed to follow essentially the same interpretation with regard to the 2008 ozone NAAQS. With respect to RFP requirements, we interpret the 15 percent VOC emission reduction requirement in CAA section 182(b)(1) such that an area that has already met the 15 percent requirement for VOC under either the 1-hour ozone NAAQS or the 1997 ozone NAAQS (for the first 6 years after the RFP baseline year for the prior ozone NAAQS) would not have to fulfill that requirement again. Instead, such areas would be treated like areas covered under CAA section 172(c)(2) if they are classified as Moderate for the 2008 ozone NAAQS, and would need to meet the RFP requirements under CAA section 182(c)(2)(B) if they are classified as Serious or above for the 2008 ozone NAAQS.
25

For the purposes of the 2008 ozone NAAQS, the EPA is interpreting CAA section 172(c)(2) to require such Moderate areas to obtain 15 percent ozone precursor emission reductions over the first 6 years after the baseline year for the 2008 ozone NAAQS, and is interpreting CAA section 182(c)(2)(B) to require such Serious and above areas to obtain 18 percent ozone precursor emission reductions in that 6 year period. Under the CAA section 172(c)(2) and CAA section 182(c)(2)(B) RFP requirements, NO
X
emission reductions could be substituted for VOC reductions.

25
Similar interpretations were made for the 1997 ozone NAAQS in the Phase 2 Ozone Implementation Rule, (70 FR 71615, November 29, 2005) and were upheld in
NRDC
v.
EPA,
571 F.3d 1245 (D.C. Cir. 2009).

With the intent of providing direction and/or flexibility to states in satisfying RFP requirements, we proposed a number of provisions to address issues relevant to implementing RFP under the 2008 ozone NAAQS: (1) Allowing states the option of selecting either the EPA's recommended baseline year or an alternate baseline year, if justifiable and appropriate; (2) restricting emission reduction measures that can be used to fulfill the RFP requirements; (3) fulfilling ROP/RFP requirements with emission reductions from sources located outside the nonattainment area; (4) removing RFP creditability determination requirements for certain pre-1990 control measures that currently achieve
de minimis
reductions; (5) requiring 15 percent VOC reductions from the nonattainment area emissions inventory baseline during a 6-year period after designation; (6) providing that areas that had previously met the 15 percent requirement for the 1-hour or 1997 ozone NAAQS would be subject to the RFP requirement of CAA section 172(c)(2) (if classified as Moderate) or 182(c)(2)(B) (if classified as Serious or above) and consistent with those provisions could substitute NO
X
for VOC; and (7) satisfying ROP/RFP requirements when a 2008 NAAQS nonattainment area is comprised of portions that have an EPA-approved RFP plan for a previous NAAQS. Through this rulemaking, the EPA is finalizing actions that address the aforementioned issues.

2. What baseline year may states use for the emission inventory for the RFP requirement?

a. Summary of Proposal

The baseline year inventory for RFP is used as the starting point from which creditable reductions are determined to meet RFP requirements. For the 2008 ozone NAAQS, the EPA proposed that states should use as the baseline year for

RFP the calendar year for the most recently available triennial emission inventory at the time ROP/RFP plans are developed. As discussed in section III.C.3 of the proposal, ROP plans for areas designated nonattainment in 2012 would be due in 2015, and we proposed the baseline year would be 2011 for these areas. We explained that this approach was analogous to the approach provided for RFP in the CAA. 78 FR 34178, at 34190 (June 6, 2013). The CAA required a 1990 baseline for the 15 percent ROP requirement which lined up with the 1996 attainment date for Moderate areas under the 1-hour NAAQS. For the 2008 ozone NAAQS, initial area designations were effective in 2012 and the 6-year RFP period from a baseline of 2011 (
i.e.,
January 1, 2012-December 31, 2017) would line up reasonably well with the Moderate attainment date of 2018.

However, we also proposed that states have the option of selecting an appropriate and justifiable alternate year as a baseline year for RFP. In the proposal, we proposed that if states choose a pre-2011 baseline year, the 6-year period for achieving the 15 percent reduction starts in January of the year following the selected baseline year. When a year prior to 2011 is chosen as the baseline year, the 6-year period thus concludes more than 1 year prior to the start of the attainment year for the area. In this situation, the EPA proposed that the area is responsible for an additional 3 percent emissions reduction each year after the initial 6-year period has concluded up to the beginning of the attainment year.

The EPA also proposed that for a multi-state nonattainment area, all states associated with the nonattainment area must consult and agree on the same year to use as the baseline year for RFP.

b. Final Action and Rationale

For the 2008 ozone NAAQS, the EPA is providing that states should use as the baseline year for RFP, the calendar year for the most recently available triennial emission inventory at the time ROP/RFP plans are developed, which in the case of areas designated nonattainment in 2012 translates to 2011. We finalized this same interpretation for purposes of implementing the 1997 ozone NAAQS. 40 CFR 51.910(d). We are also allowing an alternate year to be used. In determining the appropriate alternate years, the EPA recognizes that some states may have initiated certain control strategies between the year the standard was finalized (2008) and the most recently available triennial emission inventory year (2011), and that it would be appropriate to recognize these investments in implementing early reductions to achieve improved air quality. We also believe that allowing alternate baseline years prior to 2008 (
e.g.,
1990 and 2007) would not be appropriate because we believe that it is necessary for RFP credit for attainment planning to be tied as directly as possible to promulgation of the 2008 ozone NAAQS. Emission reduction measures adopted into the SIP prior to promulgation of the 2008 NAAQS are certainly helpful for improving air quality, and consequently may lower the nonattainment classification of an area and the baseline inventory. However, they are not readily tied to attainment planning for the specific standard and associated nonattainment designation that did not yet exist when the measures were adopted, and therefore are not appropriate to be credited for fulfilling nonattainment area RFP requirements for the 2008 ozone NAAQS. We also recognize that since we designated most areas on April 30, 2012, with an effective date 60 days after publication in the
Federal Register
, that 2012 (the designation year) is an appropriate alternative baseline year consistent with the subpart 2 structure. With these considerations, the EPA is finalizing that states may use an alternate year (
i.e.,
other than 2011) between the years of 2008 to 2012 that the state justifies as appropriate. We are also finalizing as proposed that states selecting a pre-2011 alternate baseline year must achieve 3 percent emission reductions each year after the initial 6-year period has concluded up to the beginning of the attainment year. For example, if 2009 is chosen as a baseline year for a Moderate area that has an attainment date of July 20, 2018, the 15 percent reductions cover the period from January 1, 2010, to December 31, 2015. The state would need to generate an additional 3 percent emissions reduction per year for the area for the years 2016 and 2017.

We are also finalizing that for a multi-state nonattainment area, all states associated with the nonattainment area must consult and agree on the same year to use as the baseline year for RFP.

c. Comments and Responses

Comment:
We received mixed comments regarding the appropriate baseline year for RFP. Some commenters believed that 2011 would be the most suitable year to use as a baseline year for ROP/RFP plans and others urged the EPA to allow states the option of justifying an alternative baseline year, including 2012, 2008, 2007 and 1990. One commenter argued that the CAA does not provide flexibility in allowing a choice of baseline year for RFP and that the EPA must set the baseline year as 2012.

Response:
While 2011 may be the most suitable year for many areas, we believe it is appropriate to provide some flexibility to choose an alternate year that falls between the year the NAAQS was established (2008) and the year of designation (2012 for the initial area designations). The EPA disagrees with the comment suggesting that the CAA does not provide the flexibility to allow states to choose the appropriate baseline year and that the EPA must set the baseline year as 2012. While the CAA does identify a specific year to use as the baseline for purposes of the 1-hour NAAQS that was in place when the CAA Amendments of 1990 were enacted, we believe use of that year (1990) as the baseline would produce absurd results if used for a revised NAAQS that is being implemented more than 20 years later. Thus, the EPA has discretion in determining how to interpret this provision of the statute for purposes of implementing the 2008 ozone NAAQS. Nothing in the statute explicitly or implicitly suggests that all areas must use the same baseline year. The purpose of the RFP requirement is to ensure areas achieve percentage reductions in emissions that will help an area attain the NAAQS and to not delay emission reductions until close to the attainment date. Thus, we believe a baseline year that is reasonably close to the designation date and within the implementation timeframe of the revised NAAQS will ensure that the goal of the RFP provisions is met. We note also, that regardless of the baseline year selected, the final regulations provide that areas must continue to achieve annual percentage reductions up to the attainment year. This will further ensure that the purpose of the RFP provisions is fulfilled. We do not believe it is reasonable to select as a baseline year for RFP purposes a year that predates both the revisions to the NAAQS in 2008 and the nonattainment designations in 2012.

Comment:
One commenter noted that the EPA's proposal would require areas selecting a pre-2011 baseline, to achieve 3 percent emission reduction each year after the initial 6-year period has concluded up to the beginning of the attainment year. The commenter urged the EPA to apply the same requirement to Moderate areas selecting 2011 as a baseline year and require an additional 3 percent emissions reduction for the final year before the attainment deadline. Comments varied on our proposal for areas to achieve 3 percent emission reductions when selecting a

pre-2011 baseline year. Commenters generally supported the alternate baseline year proposal, however, opposing commenters stated the proposed 3 percent reduction requirement seemed to penalize states selecting a pre-2011 baseline year.

Response:
The first commenter correctly identifies that the EPA's selection of the 2011 baseline year creates a gap period of up to 12 months between the end of the 6 year ROP period and the latest attainment date for Moderate areas. The final rule specifies that RFP for this 1-year gap period is whatever additional emissions reductions are needed to achieve the goal of attainment. We believe that requiring Moderate areas using 2011 as a base year to obtain an additional 3 percent per year during the 2018 attainment year where doing so is not necessary to attainment would be more than Congress intended to require through the RFP requirements under Part D of Subchapter 1 of the CAA Amendments of 1990. However, because a pre-2011 baseline would be voluntarily selected by a state and would create a larger gap period before the attainment date than a 2011 baseline (as much as 2 to 4 years), we believe the language “whatever additional emissions reductions are needed for attainment” is not specific enough to ensure annual incremental progress through the latest attainment date. Therefore, we are finalizing as proposed an additional 3 percent per year as a reasonable RFP reduction requirement for a state that chooses to take advantage of the regulatory flexibility this regulation offers by selecting a pre-2011 baseline. CAA section 171(1) defines reasonable further progress under Subpart D to include such annual reductions as “may reasonable be required by the Administrator for the purpose of ensuring attainment of the applicable national ambient air quality standard by the applicable date.” Consistent with that, if a state chooses to use an earlier baseline year, its total RFP emission reduction obligation should be to ensure that additional reductions averaging 3 percent per year for each year beyond the first 6 years until the year before the attainment year are provided for in the RFP plan. However, the EPA continues to believe the 2011 NEI reporting year is the preferred baseline year for RFP planning purposes.

Comment:
Comments were mixed in relation to the proposal that states associated with multi-state nonattainment areas must consult and agree on the same alternate year to use as the baseline year for RFP. Commenters generally agreed with our proposal, however, several commenters indicated that RFP demonstrations are state specific and do not necessarily rely on a regional inventory.

Response:
The EPA believes that the CAA requires that RFP be demonstrated for a nonattainment area as a whole. Thus, in order to effectively analyze RFP reductions and ensure that the entire nonattainment area achieves the RFP requirements, it is critical that the same baseline be used for all portions of the area. We note that CAA section 182(j), requires that states in a multi-state nonattainment area take all reasonable steps to coordinate their plan.

3. Can emission reductions from sources located outside the nonattainment area boundary apply toward ROP and RFP?

a. Summary of Proposal

The EPA proposed that for the 2008 ozone NAAQS states may not take credit for VOC or NO
X
reductions occurring outside the nonattainment area for purposes of meeting the 15 percent ROP requirement and 3 percent RFP requirements of CAA sections 172(c)(2), 182(b)(1) and (c)(2)(B). In the preamble to the proposal, the EPA noted that it would be sound policy to allow areas to use reductions coming from outside the area to meet ROP/RFP requirements, but concluded that in light of the reasoning used in
Natural Resources Defense Council (NRDC)
v.
EPA,
571 F.3d 1245 (D.C. 2009), and the language of the CAA, there is no legal basis for states to credit emissions reductions from sources outside the nonattainment area for satisfying ROP/RFP requirements. In the proposed rule, we also stated that if the EPA received comment providing a clear legal justification for allowing areas to take credit in their RFP plan for reductions outside the nonattainment area, we would consider adopting that approach in the final rule.

b. Final Action and Rationale

The EPA is finalizing the interpretation that states may not take credit for VOC or NO
X
reductions occurring from sources outside the nonattainment area for purposes of meeting the 15 percent ROP and 3 percent RFP requirements of CAA sections 172(c)(2), 182(b)(1) and (c)(2)(B). This approach means that ROP credit for meeting the 15 percent VOC requirement for Moderate and above ozone nonattainment areas in CAA section 182(b)(1), and the additional 3 percent per year RFP requirement for Serious and above ozone nonattainment areas in CAA section 182(c)(2)(B), or for meeting the RFP requirement of CAA section 172(c)(2) for Moderate areas that met the 15 percent requirement for a previous NAAQS, can come only from emission reductions from sources located within the nonattainment area.

The ROP/RFP requirements in CAA sections 182(b)(1)(A)(i) and 182(c)(2)(B) require that nonattainment SIPs provide for emission reductions from “baseline emissions.” CAA section 182(b)(1)(B) defines baseline emissions as “the total amount of actual VOC or NO
X
emissions from all anthropogenic sources
in the area.”
(emphasis added) The ROP/RFP language in 182(b)(1)(B) and 182(c)(2)(B) is almost identical to the language in the CAA's RACT provision that the D.C. Circuit Court has interpreted as requiring emission reductions to come from within the nonattainment area and not “from sources outside the nonattainment area.”
NRDC
v.
EPA,
571 F.3d 1245, 1256 (D.C. Cir. 2009). Accordingly, for reasons explained more fully in the proposal, 78 FR 34178, at 34191 (June 6, 2013), the EPA has concluded that there is no legal basis allowing states to credit reductions achieved at sources outside the nonattainment area toward meeting ROP/RFP requirements.

c. Comments and Responses

Comment:
Several commenters suggested that the EPA allow credit toward meeting ROP/RFP for emission reductions from an area larger than the nonattainment area but related to or affecting it, such as the same airshed or an air quality control region or a “transport couple area.” These comments emphasized the close connection between air quality within the nonattainment area and emissions from outside that area and argued that controlling emissions from an area outside a nonattainment area may be a very effective way to improve air quality within the nonattainment area. They argued that statutory references to “the area” do not necessarily refer only to the “nonattainment area.” A commenter suggested that CAA section 107(c) provides the EPA the authority to allow outside-the-area reduction credits for satisfying RFP requirements. Other commenters note that CAA section 182(b)(1)(B), viewed in isolation, does not directly refer to sources in the nonattainment area, but rather to “sources in the area,” and that
NRDC
v.
EPA
addresses sources in the nonattainment area only for purposes of meeting RACT nonattainment SIP requirements under CAA section 172(c)(1). Other commenters took the opposite view, arguing that the EPA had no legal basis for allowing states to use

out of area reductions to meet RFP requirements.

Response:
As explained more fully in the Response to Comments document in the docket, to some extent, the comments in support of allowing out-of-area credits were either policy arguments or suggestions about how best to implement a program allowing such credits. The EPA agrees that some of these are good policy arguments, but does not see a legal basis to allow this approach. While some commenters did provide legal arguments, upon examination the EPA does not believe they overcome the restrictions in the combined language of CAA section 182(b)(1)(B) with CAA sections 182(b)(1)(A)(i) and 182(c)(2)(B), and the reasoning in
NRDC
v.
EPA
concerning reductions within the nonattainment area. (
See
the Response to Comments document, located in the docket, for detailed responses to all of the arguments presented and explaining why the EPA believes the statutory provisions taken as a whole clearly support the interpretation that these RFP reductions must occur within the nonattainment area).

4. Restrictions on Emission Reduction Measures That Can Fulfill the ROP/RFP Requirement

a. Summary of Proposal

The EPA proposed that, except as specifically provided in CAA section 182(b)(1)(D) of the CAA, all SIP-approved or federally promulgated emissions reductions that occur after the baseline emissions inventory year are creditable for purposes of the ROP/RFP requirements, provided that the reductions meet the standard requirements for creditability. That is, to receive SIP credit, the reductions must be enforceable, quantifiable, permanent and surplus.

b. Final Action and Rationale

We are finalizing, as proposed, that all SIP-approved or federally promulgated emissions reductions that occur after the baseline emissions inventory year from sources located in the nonattainment area are creditable for purposes of the ROP/RFP requirements, provided the reductions meet the standard requirements for creditability and are not prohibited by section 182(b)(1)(D) of the CAA.

For the reasons provided in the preamble to the proposed rule, 78 FR 34178, at 34187 (June 6, 2013), the EPA believes it is appropriate to credit emissions reductions that actually occur during the relevant ROP/RFP period and after the baseline year. We promulgated a regulatory provision adopting this same interpretation for purposes of implementing the 1997 ozone NAAQS. 40 CFR 51.910(a)(2). No significant comments were received.

5. How should states account for non-creditable reductions when determining compliance with the ROP/RFP emission reduction requirements?

a. Summary of Proposal

CAA Section 182(b)(1)(D) specifies four categories of control measures that are not creditable toward the 15 percent ROP requirement under CAA section 182(b)(1)(A): (i) Measures related to motor vehicle exhaust or evaporative emissions promulgated by January 1, 1990; (ii) regulations concerning Reid vapor pressure (RVP) promulgated by November 15, 1990; (iii) measures to correct previous RACT requirements; and (iv) measures required to correct I/M programs. As noted in the proposal, with the exception of the first category, reductions from these measures were achieved many years ago, so the question of creditability is moot for RFP credits for the 2008 ozone NAAQS. Citing an assessment that at this point in history the ongoing emissions reductions from pre-1990 control measures in the first category are
de minimis
the EPA proposed that states would no longer need to perform the complicated calculations for these control measures to ensure that they are not credited toward the 15 percent ROP requirements under CAA section 182(b)(1)(D). (
See
78 FR 34178 at 34189)

b. Final Action and Rationale

Consistent with the proposal, the EPA is finalizing the approach that eliminates any obligation for states to continue to perform emissions reduction calculations for the pre-1990 control measures listed under CAA section 182(b)(1)(D)(i).

The CAA section 182(b)(1)(D)(i) provides that motor vehicle emission reductions resulting from measures promulgated “by January 1, 1990,” (which can only come from pre-1990 vehicles), are “not creditable.” The EPA is aware that making the calculations necessary to ensure a state does not take credit for these measures would be “a very resource intensive process requiring multiple modeling runs and extensive staff time,” as we stated in the proposal for this rulemaking.
26

Furthermore, the EPA recognizes that emissions from pre-1990 vehicles are a very small and diminishing part of the total emissions inventory for any RFP-related year associated with implementation of the 2008 ozone NAAQS (which under the final implementation rules could start, at earliest, in 2008). This final action will relieve states of the burden of doing the calculations “based on the
de minimis
nature” of the potential credits.
27

26

See
78 FR 34178, at 34190 (June 6, 2013).

27

Ibid
.

c. Comments and Responses

Comment:
A majority of commenters supported removing the calculations requirement. However, one commenter argued that the EPA cannot remove the calculation requirement because the provision in 182(b)(1)(D) that certain emission reductions are “not creditable” toward RFP reductions “is the sort of extraordinarily rigid statutory provision that does not allow for
de minimis
exceptions.” The commenter further asserts that the EPA has not demonstrated that the non-creditable reductions will always be
de minimis
because the EPA failed to review the impact of this exception on any specific nonattainment areas, relying instead on national modeling from which the EPA has claimed that local results may vary.

Response:
The EPA thanks the commenters that support this approach. The EPA disagrees, however, with the commenter who argued that the EPA cannot relieve states of this burden based on the
de minimis
impact of the measures.

CAA section 182(b)(1)(C) established a general rule
allowing
credit toward RFP requirements for emission reductions under a SIP that would occur within the 6 years following November 1990. CAA section 182(b)(1)(D) established four narrow exceptions to that general rule, three of which are currently entirely moot because they have already occurred and are not ongoing reductions for future RFP purposes. The comment concerns the motor vehicle emission reduction measures imposed on pre-1990 motor vehicles. The EPA has concluded that these reductions are ever diminishing as each year the motor vehicle fleet continues to replace older vehicles with new vehicles. The EPA estimates that by 2017 the control measures that apply to the pre-1990 portion of the nationwide vehicle fleet would account for only between 0.2 and 0.6 percent of total on-road VOC or NO
X
emissions, or between about 0.1 and 0.3 percent of total VOC or NO
X
emissions inventories. Because calculating those emissions reductions would be very resource intensive, the EPA proposed not to require states to calculate them based on the
de minimis
nature of the reductions. Courts recognize that agencies generally have

discretion to overlook circumstances that in context can fairly be considered
de minimis
such as requirements whose literal application would mandate pointless expenditures “when the burdens of regulation yield a gain of trivial or no value.”
28

The EPA does not believe that the creditability exemption in 182(b)(1)(D)(i) is so “extraordinarily rigid” as to preclude a
de minimis
exception.

28

See Alabama Power Co.
v.
Costle,
636 F.2d 323, 360 (D.C. Cir. 1979).

The comment also claims that the EPA has not demonstrated that these circumstances are
de minimis.
Without disputing the EPA's conclusions as to either the share of the emissions inventory or the resource burdens of the calculations, the comment nevertheless claims that “local results may vary,” and the EPA must assess reductions in “specific nonattainment areas.” The comment does not identify any area where, or any evidence that, the impact of the credits anywhere would be more than
de minimis.
Moreover, the EPA implicitly accounted for local variations when it concluded in the proposal that reductions associated with pre-1990 vehicles “everywhere” will be “a very small fraction of the total on-road VOC emissions inventory by 2017.”

6. What are the RFP plan requirements for 2008 ozone nonattainment areas for which no portion of the area has previously been required to meet the 15 percent ROP requirement for VOC in section 182(b)(1) of the CAA?

a. Summary of Proposal

We proposed that newly designated 2008 nonattainment areas,
29

namely 2008 ozone nonattainment areas for which a state has never adopted and implemented a SIP providing for the CAA section 182(b) 15 percent VOC emission reductions, will be subject to the 15 percent ROP requirement in CAA section 182(b)(1).

29
Hereafter in the discussion of RFP requirements within this section, when we use the term “2008 nonattainment area” we mean “nonattainment area classified as Moderate or higher under the 2008 ozone NAAQS.”

We also proposed that for any 2008 ozone nonattainment area, a state could meet the 15 percent ROP requirement in whole or in part with NO
X
reductions in lieu of VOC reductions if that state could demonstrate that the area had in fact achieved a 15 percent reduction in VOC emissions within 6 years from a 1990 baseline.

We also proposed that if we did not finalize the proposal to allow
any
area to substitute NO
X
reductions for VOC reductions where a state can demonstrate that the area achieved a 15 percent reduction in VOC emissions from a 1990 baseline, then we would allow such substitution only for new 2008 nonattainment areas located in the OTR that would be subject to the 15 percent ROP requirement for the first time.

b. Final Action and Rationale

We are finalizing that the ROP plan for a 2008 nonattainment area that has not previously adopted and implemented a SIP providing for a 15 percent reduction in VOC emissions consistent with CAA section 182(b)(1) must provide for a 15 percent reduction in VOC emissions from the area's baseline emissions in the 6 years following the baseline emissions inventory year. This is consistent with the CAA section 182(b)(1) requirement and the prior approach for the 1997 ozone NAAQS. 40 CFR 51.910(a)(1)(i). The EPA is not finalizing either of the additional approaches that would have allowed areas to meet the 15 percent ROP requirement in whole or in part with NO
X
reductions in lieu of VOC reductions. After reviewing all comments submitted the EPA does not believe that it has the authority under the CAA to allow NO
X
substitution for VOC emissions reductions for the 15 percent ROP requirement in any area that has not previously met the 15 percent reduction requirement, including an area in the OTR.

c. Comments and Responses

Comment:
Several commenters raised objections to the EPA's proposal that would allow only areas in the OTR to meet the RFP requirements by allowing NO
X
substitutions. The commenters argued that it would be better to allow all areas to take advantage of this alternative.

Response:
Although attainment areas in the OTR were not required to adopt 15 percent RFP plans under section 184 of the CAA, we discussed certain VOC reduction measures in the proposal. We expected that the VOC reductions from those measures would account for a significant portion of the 15 percent requirement for areas designated nonattainment. We reasoned that since attainment areas in the OTR are required to adopt and implement many of the same measures applied in nonattainment areas such areas should be treated as having met the 15 percent VOC reduction requirement if they can demonstrate that they did, in fact, achieve a 15 percent reduction in VOC emissions during the relevant time period, even though they of course would not have submitted a 15 percent plan as they were not subject to the 15 percent requirement at that time. The EPA has reconsidered its proposal and now believes it does not have authority under the CAA to allow NO
X
substitution for VOC emissions reductions for the 15 percent ROP in any area, including an area located in the OTR, unless the area has previously submitted, adopted and implemented a SIP providing for a 15 percent VOC reduction in emissions from the area's baseline emissions. These emissions reductions would have to have been produced in the 6 years following the baseline emissions inventory year consistent with the requirement in CAA section 182(b)(1) and the prior approach for the 1997 ozone NAAQS. 40 CFR 51.910(a)(1)(i).

Comment:
One commenter supported the proposed alternative that would allow areas to substitute NO
X
for VOC, in part or in whole, in the 15 percent ROP plans because the scientific understanding of the relative roles of VOC and NO
X
control has improved. However, numerous commenters stated their understanding that new nonattainment areas become subject to CAA section 182(b)(1) and are therefore subject to the 15 percent VOC-only ROP emission reduction requirement which does not provide for any NO
X
substitution.

Response:
The EPA agrees that the current understanding of the role of NO
X
reductions in reducing ozone would suggest that, in some areas, it would be relatively more efficient to focus attainment planning efforts on achieving reductions in NO
X
rather than VOC emissions. However, for new nonattainment areas, CAA section 182(b)(1) expressly requires the 15 percent ROP plans to reduce emissions of VOC. It does not provide discretion to meet these requirements by reducing emissions of other pollutants. Where Congress intended to allow such a substitution, it specifically provided so, such as in CAA section 182(c)(2)(C) which allows NO
X
to be substituted for VOC in the 3 percent annual RFP plans for Serious and above areas. Absent a showing of absurd results which the record for this action does not support, the EPA does not believe it has discretion to allow NO
X
substitution in this case.

7. What are the ROP/RFP plan requirements for 2008 ozone NAAQS nonattainment areas that consist entirely of one or more areas that fulfilled the 15 percent ROP plan requirement for VOC for a former ozone NAAQS?

a. Summary of Proposal

We proposed that any 2008 nonattainment area which consists entirely of a nonattainment area, or portions of nonattainment areas, for which we previously approved an RFP plan as meeting the 15 percent ROP plan requirement for VOC in section 182(b)(1) of the CAA would not need to submit such an ROP SIP. Such a 2008 nonattainment area could consist of one or more 1-hour nonattainment areas, one or more nonattainment areas under the 1997 ozone NAAQS, or a combination of nonattainment areas for either the 1-hour or 1997 ozone NAAQS.
30

Consistent with our approach for the 1997 ozone NAAQS, we proposed to interpret the CAA's RFP provisions to mean that a 2008 nonattainment area that had already achieved a 15 percent reduction in VOC emissions per an approved 182(b)(1) ROP SIP, would instead be subject to the RFP requirement of CAA section 172(c)(2) (which the EPA has interpreted to represent 15 percent emissions reductions over the first 6-year period) if classified as Moderate, or the 3 percent per year requirement of CAA section 182(c)(2)(B), if classified as Serious or above, and under those requirements could substitute NO
X
emission reductions for VOC emission reductions.

30
The following nonattainment areas were nonattainment for both the 1-hour and the 1997 ozone NAAQS, and remained the same size under the 2008 ozone NAAQS compared to the 1997 ozone NAAQS: Baltimore, MD; Los Angeles-San Bernardino Counties (West Mojave Desert), CA; Los Angeles-South Coast Air Basin, CA; Riverside County (Coachella Valley), CA; Sacramento Metro, CA; San Joaquin Valley, CA; and Ventura County, CA.

b. Final Action and Rationale

We are finalizing as proposed, such that 2008 nonattainment areas that have previously met the CAA requirement for a 15 percent ROP VOC reduction plan for the entire area are not required to fulfill that requirement again. This is consistent with the approach we used for the 1997 NAAQS, and the D.C. Circuit Court's decision in
NRDC
v.
EPA.
31

In that case, concerning the EPA's same interpretation for implementing the 1997 ozone NAAQS, the Court held that CAA section 182(b)(1) is ambiguous under these circumstances and that it was reasonable for the EPA to interpret it not to require areas that had already met the 15 percent VOC emission reduction requirement to obtain another 15 percent reduction in VOC emissions. Instead, for purposes of the 1997 ozone NAAQS and for purposes of the 2008 ozone NAAQS, the EPA interprets the RFP requirement of CAA section 172(c)(2) to require an area classified as Moderate to achieve an average 3 percent annual reduction in VOC and/or NO
X
emissions for the first 6 years following the baseline year, and the RFP requirement in CAA section 182(c)(2)(B) to require the same thing for areas classified as Serious or higher. Under these circumstances, RFP requirements may be satisfied with reductions in either NO
X
or VOC emissions. As explained in the proposal, we believe there are two policy reasons for interpreting this ambiguous provision in this manner. First, both our understanding of the effects of reductions of VOC and NO
X
on ambient ozone levels and the technical tools to help predict what combinations of reductions of ozone precursors will be most effective for ozone reduction in any area have improved. Since the purpose of the RFP provisions in CAA sections 172 and 182 is to foster the achievement of reasonable further progress toward attainment, we believe that it makes the most sense to allow states to credit toward the RFP requirement those reductions that an area most needs to reach attainment. Second, as explained more fully in the proposal, the mix of emissions across the country and in specific areas is very different than it was in 1990 because of various measures and developments that have substantially reduced the anthropogenic VOC emissions inventory such that additional area-specific VOC reductions will be increasingly difficult to achieve.

31

See NRDC
v.
EPA,
571 F.3d 1245 (D.C. Cir. 2009).

c. Comments and Responses

Comment:
Numerous commenters agreed with the EPA's proposal that 2008 nonattainment areas that have already met the CAA requirement for a 15 percent VOC reduction plan are not required to fulfill that VOC requirement again. Two commenters generally supported the EPA's approach but argued for reducing the showing a state must make or giving states more latitude in determining how to treat new nonattainment areas. However, one commenter stated that although the Court in
NRDC
v.
EPA,
571 F.3d 1245 (D.C. Cir. 2009), held that the EPA could permissibly read the statute as requiring SIPs to provide for the 15 percent VOC reduction only once, the Court did not address the question of whether mere EPA approval of a prior 15 percent ROP SIP would satisfy the 15 percent requirement for a subsequent NAAQS, or whether the area would have to show it actually achieved the 15 percent VOC reduction within the 6 years required by the statute. The commenter stated that to be creditable, the 15 percent reduction must have actually occurred within 6 years of November 15, 1990, due to implementation of measures required under the SIP, rules promulgated by the EPA, or title V permits. Accordingly, the commenter believed the EPA cannot treat previously approved ROP plans as satisfying the 15 percent ROP requirement unless the state also shows that the required VOC reductions were actually achieved as required by CAA section 182(b)(1)(C).

Response:
The EPA thanks the commenters for their supporting comments. The EPA disagrees, however, that states must demonstrate that they achieved the 15 percent reduction within 6 years of the baseline for a previous NAAQS. We have consistently maintained that if an area has already met the requirement to submit for approval and to implement a plan for reducing VOC emissions by 15 percent within 6 years of the baseline year for either the 1-hour or the 1997 ozone NAAQS, then the area should not be required to meet that requirement a second time for the 2008 ozone NAAQS but instead will be subject to the other applicable RFP provisions of the CAA.

8. What are the RFP plan requirements for 2008 ozone NAAQS nonattainment areas that include portions consisting of all or a piece of one or more nonattainment areas for a previous NAAQS that fulfilled the 15 percent ROP plan requirement for VOC for that previous NAAQS and portions that have never been subject to or have never submitted the 15 percent ROP plan for VOC for a previous NAAQS?

a. Summary of Proposal

For those areas that include all or part of a nonattainment area under a former ozone NAAQS that fulfilled the 15 percent ROP plan requirement for VOC and all or part of an area that was not subject to or did not meet the 15 percent requirement for a former ozone NAAQS, we proposed that a state may choose between two approaches for addressing the 15 percent ROP requirement. First, the state could choose to treat the entire area as an area that never met the 15 percent requirement and submit a new

15 percent plan for the entire area. Second, the state could choose to treat the 2008 nonattainment area as divided into two portions: The non-ROP plan portion and the former ROP plan portion. For the non-ROP plan portion of the 2008 nonattainment area, the plan would establish a separate 15 percent ROP VOC reduction requirement under CAA section 182(b)(1) of subpart 2. However, VOC emissions reductions to meet the 15 percent requirement could come from across the entire 2008 nonattainment area, provided that the former ROP plan portion of the area also has a VOC reduction target as part of its ROP plan for the 2008 ozone NAAQS. If the 2008 ozone NAAQS ROP plan for the former ROP plan nonattainment area relies solely on NO
X
reductions, then the portion of the nonattainment area never before subject to nonattainment requirements is still responsible for the full 15 percent VOC reductions. We also stated in the proposal that for the former RFP plan portion of the 2008 nonattainment area, the RFP requirements in CAA section 172(c)(2) will apply to Moderate nonattainment areas and the RFP requirements of CAA section 182(c)(2) apply to areas classified as Serious and above. These areas may both substitute NO
X
for the VOC reductions in the manner specified in CAA section 182(c)(2)(C).

b. Final Action and Rationale

We are finalizing the two proposed approaches that a state may choose between for addressing the 15 percent ROP requirement where a portion of the area submitted and implemented a 15 percent ROP plan for a previous ozone NAAQS and a portion did not. First, the state may choose to treat the entire area as an area that never met the 15 percent ROP VOC reduction requirement in CAA section 182(b)(1). Second, the state may choose to treat the 2008 nonattainment area as divided into two portions: The non-ROP plan portion and the former ROP plan portion. For the non-ROP plan portion of the 2008 nonattainment area, the plan would establish a separate 15 percent VOC reduction requirement under CAA section 182(b)(1) of subpart 2. However, divergent from our proposal that would have allowed creditable VOC reductions to come from across the entire 2008 nonattainment area, the final rule requires that VOC emission reductions to satisfy the CAA section 182(b)(1) 15 percent requirement must come entirely from within the non-ROP plan area.

For the former ROP plan portion of the 2008 nonattainment area, the RFP requirements in CAA section 172(c)(2) apply if the 2008 nonattainment area is classified as Moderate. CAA section 182(c)(2)(B) RFP requirements apply if the 2008 ozone NAAQS nonattainment area is classified as Serious or higher.

The EPA believes that nonattainment areas with a previously approved 15 percent plan developed to satisfy previous ozone NAAQS standards are not required to adopt a second 15 percent VOC ROP plan under CAA section 182(b)(1) for purposes of the 2008 ozone NAAQS. The EPA believes that if a portion of the nonattainment area was not subject to an approved 15 percent plan for previous ozone standards, then CAA section 182(b)(1) applies to that portion of the 2008 nonattainment area. We are offering two options, as described previously, and states can select the appropriate option to meet the RFP requirements. However, due to significant comments received regarding the source of reductions to satisfy the 15 percent requirement for the non-ROP portion of the area, we are requiring that VOC emissions reductions to meet the 15 percent requirement must come from within the boundaries of the non-ROP plan portion rather than from across the entire nonattainment area as we proposed. Additionally, the ROP plan for the 2008 ozone NAAQS for the new non-ROP plan portion must provide for 15 percent VOC reductions.

c. Comments and Responses

Comment:
One commenter opposed both of the EPA's proposed options, believing that they are not permissible under the CAA because a prior ROP plan for just part of a 2008 nonattainment area cannot be deemed to satisfy the ROP plan requirement—that “area” is different from the area encompassed by the prior ROP plan. The commenter argued that the prior ROP plan could not have provided the 15 percent baseline emissions reduction in an “area” that was not even defined at the time of the prior ROP plan. The commenter also argued that the statute does not allow the EPA to divide up “the area” into multiple sub-areas with separate ROP plans or requirements. The commenter also argued that it would be illegal and arbitrary to allow a sub-area to claim credit for emission reductions from outside the sub-area without having to also add emissions from outside the sub-area to its baseline. The commenter stated that unless the EPA is proposing to require that the non-former ROP sub-area assure a net 15 percent cut from new baseline emissions for the entire 2008 nonattainment area, it cannot allow the sub-area to claim credit for reductions outside the sub-area. The commenter believed that for sub-areas within the nonattainment area, each with its own 15 percent reduction obligation, that the required VOC emission reductions must come from inside each sub-area respectively.

Response:
The EPA recognizes that a prior ROP plan would not necessarily encompass the newly designated portion of a 2008 nonattainment area and that the newly designated portion may not have previously been covered by an approved 15 percent ROP VOC plan. In light of this comment, the EPA has reconsidered the proposal and now believes that if a portion or portions of a nonattainment area for the 2008 ozone NAAQS was/were not subject to an approved 15 percent ROP VOC-only plan for either the 1-hour or the 1997 ozone NAAQS, then CAA section 182(b)(1) requirements apply to that new portion of the 2008 NAAQS nonattainment area.

The EPA disagrees with the commenter's assertion that the statute does not allow areas to be divided into former ROP plan areas and new non-ROP areas. Consistent with the reasoning in the Phase 2 Rule, upheld in
NRDC
v.
EPA,
we believe that an area, or a sub-area that has never met the 15 percent requirement must do so, but that an area (or sub-area) that has previously met the requirement need not be subjected to it for a second time. Based on similar reasoning, we have reconsidered our proposal that would have allowed emission reductions from across the entire nonattainment area to be creditable toward achieving the 15 percent ROP VOC reductions for the non-ROP portion(s) of the area. We now believe it is important to recognize that VOC emissions reductions to meet the 15 percent ROP VOC reduction requirement must come from within the boundaries of the non-ROP plan portion. Accordingly, the ROP plan for the 2008 ozone NAAQS for the new non-ROP plan portion must demonstrate achievement of 15 percent VOC reductions from that sub-area's baseline.

9. Alternative Approaches to Achieving RFP

a. Summary of Proposal

We requested comment on two alternative approaches to achieve RFP: (1) An air quality-based approach that would measure RFP in terms of ambient air quality improvements tied to an area's percent emission reduction; and, (2) an approach that would adjust (or “weight”) the amount of RFP credit given for reductions of individual species (or similar groups) of VOC based

on their ozone forming potential (
i.e.,
photochemical reactivity).

For each of these alternative approaches, the EPA sought comment on the usefulness and practicality of the approach, and specifically on whether there is an adequate legal basis under the CAA to approve SIPs that would employ it.

b. Final Action and Rationale

The EPA is not taking final action on these alternative approaches. The EPA may further consider such alternatives in the future. The EPA believes that more time is needed to better understand the scientific and legal issues involved in allowing and implementing these approaches. In the meantime, use of these approaches may be considered on a case-by-case basis. If states wish to pursue either of these approaches, then we encourage them to work closely on developing such an approach with their respective EPA Regional Offices. If a state submits an alternative approach to achieving RFP, then the EPA will address the submittal in a separate notice and comment rulemaking action.

c. Comments and Responses

Comment:
Some commenters, while supporting the approaches, believed that the EPA must provide more information on how both the VOC-weighted approach and the air quality-based approach would be implemented, a stronger legal justification for allowing these alternatives, and more scientific support for practical implementation. There were commenters that supported the air quality-based approach. One commenter stated that the air quality alternative would better reflect the air quality progress being made in areas adjacent to an upwind nonattainment area, whereby the downwind areas must rely on large upwind emission reductions to attain the ozone standard. The commenter also argued that states should have the opportunity to demonstrate that such an approach is equivalent to or better than an emission reduction target and believes it would qualify as an equivalent planning procedure under CAA section 172(c)(8) and should be included in the final rule. The commenter indicated a similar approach was included in the implementation rules that govern SIP development for the PM
2.5
NAAQS (40 CFR 51.1009(g) and (h)). Other commenters pointed out that the VOC-weighted reactivity method has already been adopted in other national, state and local ozone regulations, such as the current national aerosol coatings rule and a highly-reactive VOC emissions cap-and-trade program and these may serve as legal and administrative precedents for other reactivity-based standards. Commenters also cautioned the EPA that such approaches should not be mandated, and must be left to the state's discretion.

There were commenters that did not support these alternative approaches, stating that the CAA clearly requires a percentage reduction from baseline emissions for purposes of RFP.

Response:
The EPA appreciates the comments it has received on these alternative approaches. As noted above, the EPA believes more time is needed to better understand the scientific and legal issues involved before finalizing any alternative approaches to achieving RFP. We encourage states interested in an alternative approach to work closely with their respective EPA Regional Offices, who may consider these approaches on a case-by-case basis. Any such actions would be addressed through separate notice and comment rulemaking including analysis of appropriate legal and technical justifications.

D. How do RACT and RACM requirements apply for 2008 ozone NAAQS nonattainment areas?

1. Reasonably Available Control Technology

a. Summary of the Proposal

The EPA indicated in the proposal that RACT SIPs must contain adopted RACT regulations, certifications where appropriate that existing provisions are RACT,
32

and/or negative declarations that there are no sources in the nonattainment area covered by a specific CTG source category. The EPA also indicated that states must provide notice and opportunity for public comment on their RACT submission even where the state determines it is appropriate to certify that the existing provisions remain RACT or where the state submits a negative declaration. States must also submit appropriate supporting information for their RACT submission as described in the Phase 2 Rule.
See
70 FR 71652.

32
The EPA has defined RACT as the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility (December 9, 1976 memorandum from Roger Strelow, Assistant Administrator for Air and Waste Management, to Regional Administrators, “Guidance for Determining Acceptability of SIP Regulations in Non-Attainment Areas” and also in 44 FR 53762; September 17, 1979). Availability and feasibility may differ across sources in the same category (June 9, 1985, memorandum from John Calcagni, Chief, Economic Analysis Branch, to G.T. Helms, “Criteria for Determining RACT in Region IV.”)

The EPA proposed a number of items regarding RACT submittals. First, the EPA proposed that states should use current EPA guidance [including existing control techniques guidelines (CTGs) and alternative control techniques (ACTs)] and any other information available in making RACT determinations.
33

The EPA recognized in the proposal that existing CTGs and ACTs for many source categories have not been revised in a number of years. However, in many cases, more recent technical information is available in other forms. The EPA proposed that as part of their RACT SIP submission, states should provide adequate documentation that they have considered control technology that is economically and technologically feasible. The analysis of economic and technological feasibility should be based on information that is current as of the time of development of the RACT SIP for the 2008 ozone NAAQS. Additionally, the EPA noted that states should consider information submitted as part of the public comment period associated with the RACT SIP.

33
The EPA's CTGs and ACTs are located at
http://www.epa.gov/air/ozonepollution/SIPToolkit/ctgs.html.

The EPA proposed that in some cases, states may conclude that sources already addressed by RACT determinations for the 1-hour and/or 1997 ozone NAAQS may not need to implement additional controls to meet the 2008 ozone NAAQS RACT requirement.

The EPA proposed to follow the EPA's existing policy with respect to “area wide average emission rates.” This policy recognizes that states may demonstrate as part of their NO
X
RACT SIP submittal that the weighted average NO
X
emission rate from all sources in the nonattainment area subject to RACT meets NO
X
RACT requirements.

The EPA proposed that as part of their RACT submissions, states have the option of conducting a technical analysis for a nonattainment area considering the emissions controls required by a regional cap-and-trade program, and demonstrating that compliance by certain sources participating in the cap-and-trade program results in actual emission reductions in the particular nonattainment area that are equal to or greater than the emission reductions that would result if RACT were applied to an individual source or source category within the nonattainment area.

The EPA provided legal reasoning for this approach.

The EPA proposed to follow its current policy that for VOC sources subject to MACT standards, states would be allowed to streamline their RACT analysis by including a discussion of the MACT controls and considerations relevant to VOC RACT. Historically, in many cases, states have been able to rely on MACT standards for purposes of showing that a source has met VOC RACT.

The EPA also noted that a state has discretion to require beyond-RACT reductions from any source, and has an obligation to demonstrate attainment as expeditiously as practicable. Thus, states may require VOC and NO
X
reductions that are “beyond RACT” if such reductions are needed in order to provide for timely attainment of the ozone NAAQS.

The EPA solicited comment on modifying existing guidance to provide additional flexibility in implementing the CAA section 182(b)(2) RACT requirements. In particular, the EPA solicited comments on whether it would be appropriate for states, as part of their RACT determinations regarding what is “reasonable,” to consider the effect (or lack thereof) of VOC emission reductions on reductions in ozone concentrations when assessing economic feasibility. The EPA solicited comments on this approach because in some nonattainment areas, additional reductions of anthropogenic VOC emissions have been scientifically demonstrated to have a limited impact on reducing ozone concentrations.

The EPA took comments on the following: (1) Whether state RACT determinations could take into consideration, in the evaluation of what is economically feasible, the potential air quality benefit (or lack thereof) of further VOC controls; (2) the specific circumstances and limitations to which an air quality benefit factor would apply; (3) specific examples of where modeling has demonstrated that anthropogenic VOC reductions have “negligible effect, ” (commenters were also asked to provide a defensible threshold for defining “ineffective,” and define a test for concluding that the effect of additional VOC reductions would be “negligible.”); (4) input regarding whether this flexibility should be provided on an individual source basis, or also on a source category basis; (5) that any approaches suggested by commenters should also address how public health and welfare will be impacted; and (6) an explanation as to the specific legal basis for supporting the suggested approach.

Finally, the EPA proposed a specific deadline by which RACT measures are to be implemented for the 2008 ozone NAAQS, which is consistent with the timeline specified in CAA section 182(b)(2). For the 2008 ozone NAAQS, we proposed that areas must implement RACT measures as expeditiously as practicable, but no later than January 1 of the 5th year after the effective date of a nonattainment designation. Nonattainment designations for all areas of the country were effective July 20, 2012. RACT measures for areas classified Moderate or above and all areas of the OTC would be required to be implemented by January 1, 2017. This would allow a comparable amount of time for sources to meet RACT requirements as originally anticipated under the 1990 CAA Amendments, consistent with the Moderate area attainment date of July 20, 2018.

b. Final Action and Rationale

The EPA is finalizing the approach where states should refer to the existing CTGs and ACTs for purposes of meeting their RACT requirements, as well as all relevant information (including recent technical information and information received during the public comment period) that is available at the time that they are developing their RACT SIPs for the 2008 ozone NAAQS. We believe that there is sufficient information available to states to inform their RACT determinations.

The EPA is finalizing the approach allowing in some cases for states to conclude that sources already addressed by RACT determinations for the 1-hour and/or 1997 ozone NAAQS do not need to implement additional controls to meet the 2008 ozone NAAQS RACT requirement. We believe that, in some cases, a new RACT determination under the 2008 standard would result in the same or similar control technology as the initial RACT determination under the 1-hour or 1997 standard because the fundamental control techniques, as described in the CTGs and ACTs, are still applicable.
34

In cases where controls were applied due to the 1-hour or 1997 NAAQS ozone RACT requirement, we expect that any incremental emissions reductions from application of a second round of RACT controls may be small and, therefore, the cost for advancing that small additional increment of reduction may not be reasonable. In contrast, a RACT analysis for uncontrolled sources would be much more likely to find that new RACT-level controls are economically and technically feasible.

34
See existing guidance in RACT Questions and Answers 2006 (May 18, 2006, Note from William Harnett to Regional Air Division Directors), Questions 17 and 18, regarding RACT certifications.

The EPA is finalizing the proposed approach with respect to “area wide average emission rates.” This approach is consistent with the EPA's existing policy.

The EPA is finalizing the proposed approach, where states have the option of conducting a technical analysis for a nonattainment area considering the emissions controls required by a regional cap-and-trade program, and demonstrating that compliance by certain sources participating in the cap-and-trade program results in actual emission reductions in the particular nonattainment area that are equal to or greater than the emission reductions that would result if RACT were applied to an individual source or source category within the nonattainment area. This approach is consistent with the Court's reasoning in
NRDC
v.
EPA
regarding the NO
X
SIP Call. Additionally, we note that in August 2013, the Court granted EPA's request for voluntary vacatur of the CAIR-RACT presumption for the 1997 ozone NAAQS. The approach we are finalizing is not inconsistent with the vacatur decision.

The EPA is finalizing the proposed approach for VOC sources subject to MACT standards, such that states would be allowed to streamline their RACT analysis by including an assessment of the MACT controls and how they relate to VOC RACT considerations. This approach is consistent with the EPA's current policy.

The EPA is finalizing the proposed approach to provide states with the discretion to require beyond-RACT reductions from any source, and that states have an obligation to demonstrate attainment as expeditiously as practicable. We believe it may be necessary in some cases for states to achieve “beyond RACT” reductions in order to demonstrate attainment as expeditiously as practicable.

The EPA is not modifying existing guidance for meeting the 182(b)(2) RACT requirements for the 2008 ozone NAAQS through this action. There is scientific information available that indicates that in some locations ozone formation is NO
X
-limited, and changes in anthropogenic VOC emissions will have little effect on ozone concentrations. However, the EPA is not prepared at this time to establish a specific definition of “negligible effect,” and believes that legal support for modifying the existing RACT guidance needs to be further explored. States, therefore, will continue to conduct

RACT determinations as they historically have. Additionally, we do not anticipate that any current NO
X
-limited nonattainment areas will immediately need to develop substantive new VOC RACT SIP submissions. Therefore, we do not expect that retaining the current RACT guidance will have any near-term impact on states or VOC sources in current NO
X
-limited nonattainment areas. However, the EPA received potentially useful information from commenters regarding the definition of “negligible effect,” which we will consider in the future as we further assess whether to modify the existing RACT guidance.

The EPA is finalizing the proposed approach that areas must implement RACT measures as expeditiously as practicable, but no later than January 1 of the 5th year after the effective date of a nonattainment designation. For the nonattainment designations that were effective July 20, 2012, RACT measures (for areas where they are required) must be implemented by January 1, 2017. This allows a comparable amount of time for sources to meet RACT requirements as originally anticipated under the 1990 CAA Amendments, and ensures that RACT measures are required to be in place no later than the last ozone season prior to the Moderate area attainment date of July 20, 2018.

c. Comments and Responses

Comment:
Several commenters supported the proposed approach that in some cases, states may conclude that sources already addressed by RACT determinations for the 1-hour and/or 1997 ozone NAAQS may not need to implement additional controls to meet the 2008 ozone NAAQS RACT requirement. Several other commenters generally did not support this conclusion. One commenter requested clarification regarding situations where a state may conclude that existing RACT controls meet RACT for the 2008 ozone NAAQS.

Response:
The EPA generally agrees with the supporting comments. The EPA disagrees with the comments opposing the proposed approach. In areas previously subject to the RACT requirement under the 1-hour and/or 1997 ozone NAAQS, states have previously addressed the RACT requirement with respect to these NAAQS. We believe that, in some cases, a new RACT determination under the 2008 standard would result in the same or similar control technology as the initial RACT determination under the 1-hour or 1997 standard because the fundamental control techniques, as described in the CTGs and ACTs, are still applicable.

We appreciate the commenter's request for m

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2015-04012. Public record. Not legal advice.